Millers increase flour price by Rs50 per bag

Threaten strike against fuel price adjustment charges.

LAHORE: Flour millers of Punjab have announced an increase of Rs50 in ex-mill price of a 20kg flour bag to Rs625, citing high cost of wheat along with a rise in costs of utilities.

They also signalled that flour price could cross Rs700 per bag if the wheat support price stood at Rs1,050 per 40 kg. Earlier, the federal government had increased wheat price by Rs100 to Rs1,050 for the current season.

Talking to the media, Pakistan Flour Mills Association (PFMA) Punjab Chapter Chairman Chaudhry Abdul Jabbar said besides the increase in flour price, the millers were also planning to go on a three-day strike against hefty fuel price adjustment charges in electricity bills for August 2011.

“Mills have already sold flour for that period and they will now have to pay the fuel price adjustment charges from their own pockets,” he said.

According to Jabbar, around 10% of flour mills had already stopped production because of high operating cost and with this fuel price adjustment around 40% would be forced to close their units.

“For a big flour mill, the fuel price adjustment charge will be around Rs10 million. How is it possible to operate mills with prolonged loadshedding and high cost of wheat and utilities,” he asked.

To decide on the strike, the central executive committee of the flour millers will meet on April 5. “If the government did not pay any attention to our demands, then we will go on strike for three days, which will later turn into an indefinite strike,” Jabbar said.

At present, ex-mill price of 20kg flour bag is Rs575, based on wheat quota purchased from Pakistan Agricultural Storage and Services Corporation (Passco) at Rs960 per 40kg. Mills are now purchasing wheat from Passco at Rs1,000, leading to an increase in flour prices.

However, if wheat support price rises to Rs1,050, then flour price may cross Rs700.

However, the millers said the price increase would be only for Punjab as in Karachi flour bag was already being sold for Rs640.

Published in The Express Tribune, March 27^th, 2012.